Magazine article Mortgage Banking

Industrial Properties Making a Comeback

Magazine article Mortgage Banking

Industrial Properties Making a Comeback

Article excerpt

ACCORDING TO ENCINO, CALIFORNIA-BASED Marcus & Millichap's Industrial Research Report 2004, the industrial market appears to have turned the corner after two years of dismal performance. The warehouse/distribution sector held steady in 2003 as builders kept speculative construction to a minimum and absorption increased at a steady rate, the report said. The major distribution hubs of the nation are expected to register the most significant improvement in 2004, but continued gains in corporate profits will start to fuel demand for properties in nearly all markets by year-end. Although Marcus & Millichap expects investment activity to remain slow due to limited for-sale inventory, it said there continues to be a large amount of capital available for placement in the industrial market, which could lead to further price increases this year.

The prime users of warehouse and distribution space, especially manufacturers and wholesalers, are experiencing a rise in orders, inventories and shipments, which will translate into increased space needs in the near future, the report said. Supported by profits in 2003 that range from 3 percent to 11 percent, the durable goods manufacturing industry is increasing production to accommodate the growing number of orders. Retail trade continues to perform well, with merchants such as Wal-Mart and Target expanding their distribution capabilities around the country. …

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